Toll finally bails out of NZ rail

Logistics solutions provider Toll Holdings has announced the completion of the sale of its New Zealand rail and ferry operations to the New Zealand Crown.

Toll managing director Paul little said the transaction, which was announced in May this year, has now been finalised and the transition arrangements were well progressed.

“We remain absolutely committed to the development of our remaining logistics operations in New Zealand, which have recently been enhanced by the acquisition of United Carriers,” he said.

The company is seeking additional New Zealand-based acquisitions to extend the scale and reach of the ongoing operations, with one of its focuses put on rail.  

Mr Little said the company believes rail can be a long-term sustainable business with the Government aiming at increasing the use of rail as freight flows continue to grow.

“We recognise the efforts of the entire workforce in significantly improving the business over the past four years, and positioning rail as the most efficient modal alternative for future transport demand throughout the country,” he said.

According to Mr Little, cash proceed from the sale of equity in the operation of NZD 690 million will be used to retire debt as well as increasing the company’s cash reserves.

Interstate truckers to boycott Queensland

The Transport Workers Union (TWU) said the Queensland Government’s fuel subsidy scheme disregards interstate truck drivers and they could consider boycotting the state.

The State Government has recently announced changes to the 8-cents-per-litre deduction scheme to ensure the $540 million per annum subsidy goes directly to motorists with a Queensland driver’s licence. 

TWU state secretary Hughie Williams said while interstate truck drivers are already suffering from soaring fuel prices, they are excluded from the discount scheme.

“When they see this fuel discount that’s going to disregard interstate truckies, don’t be surprised if they simply say we won’t deliver freight to Queensland, and that could be a very serious problem,” Mr Williams told the ABC.

“Thousands of tonnes of goods and produce is being carted in and out of Queensland and those people spend many weeks of their time in Queensland.

“They’re going to get very, very annoyed and they’ve got every right to be very annoyed about it."

Asciano rises on Brambles sale

Asciano has finally rid itself of the remnants of its ill-advised takeover of pallet giant Brambles, raising $484m in the process.

Asciano Group managing director and chief executive officer Mark Rosthorn has confirmed that the company sold its remaining stake of approximately 48.7 million shares in Brambles Limited at an average price of $10.11 per share. The shares have been sold to a range of institutional investors. The company will use the majority of the proceeds of the sale to retire existing debt, with the balance available for general working capital purposes.

Mr Rowsthorn said: “The sale of our Brambles shares achieves two key objectives for Asciano. It allows us to retire a $406 million debt facility, improving our overall level of gearing and enhancing balance sheet flexibility.

"Importantly, the sale also allows Asciano to focus on our core businesses and on enhancing securityholder value through continuing to apply our operating expertise and pursuing key growth initiatives within our existing operations."

Asciano expects the impact of the Brambles stake on its 2007/08 full-year results (including realised losses net of dividends), to be a non-recurring loss of approximately $85 million before tax and funding costs.

“It is obviously disappointing to have sold the shares at a loss," Mr Rowsthorn said. "However, we believe that the strategic advantages to the Company of divesting the Brambles stake outweigh the one-off impact on our results, particularly in the current market environment.”

Analysts believe the holding costs incurred in carrying the Brambles shares has severely restricted the company’s capacity to grow by acquisition, at a time when private equity firms and overgeared operators are looking to offload prime transport and infrastructure assets at rockbottom prices.

Some commentators expect Mr Rowsthorn will use the company’s new-found cash to make strategic investments in the coal supply chain, whilst others have forecast a move to build up Asciano’s global reach by acquiring European and/or Asian transport and logistics companies.

Asciano is currently trading at $4.35, up from an all-time low of $3.57. Brambles has also edged higher, its shares being traded around $10.30.

Incat’s Japanese Cat No. 2 on the prowl

Incat fast ferry for Japan's Natchan World

The newest 112 metre Incat vessel, Natchan World, destined for service with Japanese operator Higashi Nihon Ferry, is currently undergoing final touches at Incat’s Prince of Wales shipyard prior to beginning sea trials.

Already her four massive 20-cylinder, 9mW engines have been started for the first time and the vessel is completing a series of tests in readiness for sea.

Natchan World’s first departure from the wharf at Prince of Wales Bay was due this morning, before passing under Hobart’s Tasman Bridge after the city’s morning rush hour. The ship will return to the Incat yard for final adjustments to be made during Friday.

On the morning of Saturday 5th April, the Natchan World will depart at around 9am and will head down the river to Storm Bay for a series of sea trials. It is anticipated she will return to the city late that afternoon.

On Sunday 6th April, the ferry will sail again for further sea trials, after which she will return to the shipyard in preparation for a naming and completion ceremony on Tuesday 8th April.

Length overall: 112.60m

Beam (moulded): 30.50m

Draught: approximately 3.93m

Speed: 40 knots

Fuel consumption: <190g/kWh

Deadweight: Up to 1450 tonnes

Total persons: 800 persons

Vehicle Deck: 450 truck-lane metres plus 193 cars or a total of 355 cars.

Exclusive mandate for Queensland freight link

Australian Transport and Energy Corridor Ltd (ATEC), the infrastructure company founded by inland railway specialist Everald Compton, over a decade ago, has today submitted a business case to the Queensland and New South Governments for the building of the Border Railway linking Moree and Toowoomba.

Compton and ATEC have asked Anna Bligh and Morris Iemma to jointly grant to ATEC an unconditional exclusive mandate for the 350 kilometre track between Moree and Toowoomba, which would be built by 2014 as a standard gauge, open access track at a cost of $ 900 million.

Its construction will mean that there ultimately will be a standard gauge inland railway from the Port of Melbourne to the Port of Gladstone with a link to the Port of Newcastle.

ATEC has a successful history with unsolicited private/public mandates. ATEC controls a twenty per cent shareholding in Surat Basin Rail Pty Ltd, and was instrumental in achieving the 2006 landmark unsolicited and unconditional exclusive mandate from the Queensland Government to complete the Toowoomba to Gladstone Railway through the Surat Coal Basin. This was the first-ever unsolicited public/private partnership mandate awarded by the Queensland Government.

Everald Compton is chairman of Surat Basin Rail, which includes ATEC’s joint venture partners Xstrata Coal, Anglo Coal, Industry Funds Management and QR. The project is currently on schedule to be completed in 2013, one year ahead of the projected completion schedule for the Border Railway.

The Border Railway will be built as a greenfields project from Moree to North Star and Yetman, crossing the border at Yelarbon and going on to Inglewood, Millmerran and Pittsworth to Toowoomba where ATEC has purchased 155 hectares of land to establish a major state-of-the art intermodal freight centre at Charlton, just west of the city at the junction of the Border and Surat Basin Railways.

The business case for the Border Railway outlines the manner in which ATEC will establish and lead a consortium to carry out the mandate for construction. This will be completed and lodged by 31 May, 2008, and those companies seeking membership of the consortium will be subject to the approval of both the NSW and QLD Governments. ATEC’s consortium partners are likely to be a rail and an infrastructure company as well as a superannuation fund and ATEC says negotiations are already well advanced with parties in those fields who have already expressed genuine interest in the substantial project.

Compton has also just delivered the business case to the federal government, as the construction of the Border Railway will create a need to upgrade existing rail tracks south of Moree and undertake the construction of the Murrurundi Tunnel to give better access to the Port of Newcastle. This work is likely to become the responsibility of the Federally owned Australian Rail Track Corporation.

Compton’s business case submission to the NSW and QLD Governments complements infrastructure minister Anthony Albanese’s announcement last week of a $15m scoping study on a standard-gauge railway linking Melbourne and Brisbane.

Compton also announced two significant and strategic freight centres that will be fundamental to the success of the Border Railway: one in Charlton in Queensland and one near Parkes in NSW.

Last month, the ATEC Freight Terminals Trust received development approval for its Charlton Freight Terminal site, which will be a major storage and distribution centre for all of south eastern Queensland delivering freight directly to and from customers in Brisbane, Gold Coast, Sunshine Coast and Ipswich without double-handling and within a time span considerably shorter than that can be achieved on the coastal railway.

In anticipation of NSW rail upgrades being completed, the ATEC Freight Terminals Trust has also secured a strategically located and well-suited large area of land (in excess of 200 ha) for the creation of an intermodal freight terminal near Parkes in central NSW, where the inland railway will cross the Perth to Sydney railway. The ATEC Parkes freight terminal is set to be the largest freight terminal in Australia and is expected to be completed by 2014.

Everald Compton said: “The Border Railway should have been built a century ago. The failure to do so represents a classic example of the dreadful impact of non-planning, as the lack of a cross-border inland railway has seriously impeded the development of large inland cities and allowed the overdevelopment of cities such as Sydney and Brisbane to the detriment of the nation.

“The fact that the building of the Border Railway will allow freight trains to run between Melbourne, Gladstone and Newcastle will mean the development of new industries in inland Australia and bring populations from capital cities to service them. Albury, Wagga Wagga, Parkes, Dubbo, Moree, Toowoomba, Dalby and Biloela will become major inland cities.

“This project will take 1,000 trucks a day off the Newell Highway, saving millions of dollars in road maintenance and greatly improving the environment and efficiency in the logistics of large-scale freight movement,” continued Compton. “It will remove freight trains from the overcrowded suburbs of Sydney and foster the further expansion of the Port of Newcastle, further slowing Sydney’s abnormal growth,” he said.

 

Singapore – Brisbane three times a day

Singapore Airlines Boeing B777

From today, Singapore Airlines is adding three weekly flights between Singapore and Brisbane. From July, the service will become three times daily, with a further four weekly flights added.

The new flights will operate every Thursday, Saturday and Sunday from today, before increasing to daily from 2 July 2008. The first of these flights departed Singapore at 0010hrs and arrived in Brisbane at 0935hrs. In the opposite direction, SQ256 took off from Brisbane at 0930hrs and touched down at Singapore Changi Airport at 1530hrs.

Like all services to Brisbane, the new flights will be operated using a Boeing 777-200 aircraft. These aircraft are popular with air cargo forwarders as they can accomodate standard ULDs under the floor and carry up to 24 tonnes in addition to the passenger load.

The new southbound services to Brisbane will provide more connections for customers from north Asia (including Japan, Korea, China and Hong Kong) as well as South East Asia. Northbound, the flight will provide good connections to Singapore Airlines’ network throughout South East Asia and India.

“Brisbane is the centre of one of Australia’s most attractive tourist regions. Demand for flights to Brisbane has been growing over the past few years, as many overseas visitors seek access to the tourist attractions it has to offer – the famous Gold Coast, the Sunshine Coast, and areas to the north, like Cairns and the Great Barrier Reef, which all use the Brisbane gateway,” said Mr.

“In building our frequencies on this route, we are committing to work closely with Tourism Queensland and the Queensland Government, which are both very supportive of the long-standing relationship we have with the state’s tourism industry.”

The services are also expected to find good support from Queensland’s burgeoning fresh food export industry.

Besides Brisbane (three times daily from 2 July), the Singapore Airlines network to Australia also includes Adelaide(daily), Melbourne (three times daily), Perth (19x times) and Sydney (four times daily from June). All Singapore Airlines flights to Australia depart from Changi Airport Terminal 3.

 

Truck drivers outraged over more port congestion

Port Botany.

Yet another congestion at Port Botany.

A massive truck queue stretching for more than four kilometres at the Port Botany terminal has caused angst among trucking operators this morning.

According to the Australian Trucking Association (ATA), the road network near the terminal has been clogged with more than 150 trucks waiting, causing hours of delay.

“This is so close to the Christmas season, this has caused a lot of angst among truck drivers and companies,” ATA NSW manger Jill Lewis told Transport and Logistics News.

Ms Lewis said the significant congestion was caused by an emergency evacuation drill that happened this morning, but the terminal operator Patrick failed to provide operators with a timely notice to mitigate confusion. 

“What we think is reasonable to ask is that there should be ample notice about the situation so we can reschedule our truck deliveries,” she said.

The ATA said it was willing to sit down with the relevant stevedores and Sydney Ports to devise short-term solutions to get through the critical time of the year in order to avoid any serious interruptions in the port logistics operations.

It stressed there also needed to be long-term solutions to revamp the inefficient road operations around the port to effectively cater for the future growth in freight demand.

Realising the problems with the severe supply chain bottleneck at the key port, the NSW Government in conjunction with Sydney Ports Corporation initiated supply chain reforms, setting up a port road taskforce.

 

The first phase of the reform initiative will be the industry-led improvement in port efficiency, facilitated by Sydney Ports, with the next phase involving government intervention to tackle issues not resolved by industry. 

The trucking industry argued Patrick seemed to have failed to implement the recommendations put up at the taskforce meeting held last month.

Air freight nosedives

The latest international air traffic figures for October have shown air cargo traffic shrank by eight per cent for a fifth consecutive month of severe drops.

According to the data released by the International Air Transport Association (IATA), air traffic experienced yet another month of global decline.

While the fall in passenger traffic has slowed, declining by 1.3 per cent compared to the 2.9 per cent fall recorded in September, the cargo sector continued its steep deterioration.

“The gloom continues and the situation of the industry remains critical,” IATA CEO Giovanni Bisignani said.

“While the drop in oil prices is welcome relief, recession is now the biggest threat to airline profitability.

“The deepening slump in cargo markets is a clear indication that the worst is yet to come,” he said.

The biggest contributors to the dismal fall were the Latin American and Asia-Pacific markets with the declines of 11.4 per cent and 11 per cent respectively.

The IATA said forecast declines in key air cargo sectors such as semi-conductors meant weakness was expected to continue.

The woes have worsened as Thailand’s Suvarnabhumi airport recently discontinued its cargo services, increasing frustration for importers and exporters.

The disruption in Thailand is expected to further hamper the air cargo sector, as the regional cargo hub handles an extensive network of just-in-time electronics with an estimated export throughput of USD 40 billion per year.

Figures from the Association of Asia Pacific Airlines (AAPA) also backed the grim conditions for the sector, with international cargo traffic showing a continued sharp decline in a pre-holiday peak season for freight handlers.

The AAPA said despite a 7.5 per cent cut in cargo capacity, the average international cargo load factor for October fell 2.6 percentage points to 65.4 per cent.

AAPA director-general Andrew Herdman said airlines worldwide were facing “extremely difficult market conditions, with expectations of even tougher times ahead in 2009.”

Mr Bisignani again urged governments to grant the beleaguering airline industry more commercial freedoms.

“As the global economic downturn re-shapes the world’s financial industry, policy makers must also understand that change is needed in air transport.

“Unlike the finance industry, airlines are not asking for handouts. Commercial freedom, efficiency and a fair treatment in taxes are needed.

“Air transport is a catalyst for economic growth. But plugging budget gaps with gratuitous travel taxes is bad policy that is not sustainable. This must change,” he said.

Australian airlines shift to survival mode

Qantas.

Australia’s major airlines are clipping their wings.

Capacity cuts and consolidation will be the overriding themes for major Australian airlines next year, as they struggle to stave off worse impacts of a global recession.

At the Qantas annual general meeting in Brisbane, Qantas chairman Leigh Clifford said while the company was better positioned than its rivals, the future business conditions remained extremely uncertain.

“It is impossible to predict how long the crisis will last or what specific implications it will have for economies around the world, for the Australian economy, and for the Qantas Group in particular,” Mr Clifford said.

“What we do know is that the Qantas Group must deal with high degrees of volatility in both the fuel price and in foreign exchange values.

“But few airlines can be better placed than Qantas to manage through this volatile era,” he said.

In the last fiscal year Qantas achieved a record profit before tax of $1.4 billion, a 46 per cent increase on the preceding year, but it recently slashed its forecast pre-tax profit for 2008/09 to $500 million.

In addition to 1,500 redundancies made in July, the carrier announced further capacity cuts last week, flatlining capacity growth.

Dixon wins big upon his departure

Headline-making Qantas CEO Geoff Dixon officially stepped down at the meeting, delegating impending challenges to Alan Joyce.

“The future of Qantas is certainly in very safe hands,” Mr Dixon said.

“Nevertheless, Alan takes over at yet another challenging time. I wish it were otherwise.”

He said while there was a real need for discipline in the short term, the long-term investment in new routes, fleet, product and service should continue, and reiterated the importance of consolidation in securing the carrier’s future position.

“I leave Qantas very confident indeed of its soundness as a business, the depth of talent in its management and people, and the scale and quality of its operations.

“The next step forward for Qantas will be to participate in consolidation of the aviation industry. The goal will be to position Qantas for the full modernisation of the industry, and enable this great Australian company to succeed as a great global enterprise,” he said.

Meanwhile, Mr Dixon’s exit was met with investors’ revolt over his final paycheque of $12.2 million. 

The company’s remuneration report also faced a considerable 40 per cent protest votes.

Qantas remuneration committee chairman James Strong attempted to play down the figure, saying it involved shares calculated at about $5 but the values now almost halved.

Virgin Blue expects the most difficult time ahead

Another Australian carrier Virgin Blue has tightened its belt as it expects the most challenging time to date.

”We expect the operating environment for the 2009 financial year to be the most difficult Virgin Blue has yet experienced,” chairman Neil Chatfield said at the annual general meeting.

The company over the last few months completed a strategic review of the business and accelerated a fuel mitigation program including commencement of a $50 million group-wide cost-savings program.

It would cut its capital spending by 12 per cent in the second half of the 2008-09 financial year, and curb its planned capacity growth, deferring aircraft deliveries. A freeze on all executive salaries has also been agreed.

In the 2007-08 fiscal year, the airline posted underlying net profit after tax of $140 million and revenue of 2.3 billion, up 8.4 per cent on the preceding year. 

V Australia, consolidation

Despite the immense challenges in the near future, the airline has high hopes for its new long-haul offshoot V Australia, set to be launched on 28 February 2009. The subsidiary will enable the company to offer flights on the less competitive Sydney-Los Angeles lane.

“Looking forward, we remain enthusiastic about the launch of V Australia.

“Despite launching in less than optimal circumstances, the fact remains that the Australia to US market has limited competition and we remain convinced of the potential of V Australia in the medium to long term,” he said.

In line with Mr Dixon’s view, Mr Chatfield said the current market conditions would fuel the industry’s move towards mergers.

“During the past few months, industry rationalisation on a regional and global scale has gained momentum.

“We expect this to continue and believe that economic conditions will driver further need for consolidation, including merger activity, across the industry,” he said.

TNT sets Guinness World Record

TNT.

Global express delivery company TNT has beaten the Guinness World Record for the fastest loading of cars onto aircraft.

Wonder how many Smart cars can be fit in the belly of a Boeing 747, one of the world’s largest aircraft? A team of seven people managed to fit 30 smart fortwo cars into a TNT Boeing 747 in only 35 minutes and 34 seconds.

The record-breaking attempt at TNT’s air hub in Belguim was planned by car magazine TopGear Italia, in order to celebrate the 10th anniversary of the Smart car, the most compact car in the world.

The 30 Smart fortwo cars were provided by Mercedes-Benz Italia and Mercedes-Benz Belgium, and TNT Liège Hub head of ground operations Christine Heine coordinated the operation.

“One of the critical aspects was to find a suitable time window to try to break the record, fitting with the arrivals and departures of all the other aircraft scheduled 24 hours a day, 365 days a year,” Heine said.

“The take-off time for each TNT aircraft is really imperative, considering its impact on the synchronised network that delivers hundreds of thousands of express parcels anytime, anywhere.”

The seven staff had only three hours to load the Smart cars into the Boeing 747, unload them and re-load the aircraft with goods leaving for Shanghai.

TNT said the result was a reflection of the professionalism of TNT employees with their ‘sure we can’ mission and the design of the Smart fortwo, a unique car that has already obtained many records in its 10-year life.

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